Golden Opportunities – Personal Goodwill Can Reduce Federal Income Tax Liability from Sales of Businesses... [ read ]
In the right circumstances, a taxpayer may be able to significantly reduce his/her federal income tax liability from the sale of his/her business by establishing that the buyer separately bargained for the purchase of that taxpayer's personally-owned property (referred to herein as "personal goodwill"). This is because a sale of personal goodwill, if respected, would result in only a single taxable event, with the taxable gain potentially subject to the beneficial long-term capital gain tax rate (with a current maximum marginal tax rate of 20%).
IRS Delays Basis Consistency Reporting Due Date... [ read ]
IRS extends the filing deadline for the new Form 8971 to March 31, 2016.
It's a Trap! Taxable Property Contributions to Partnerships with Related Foreign Partners – Treasury Intends to Promulgate and Retroactively Apply Regulations... [ read ]
Conventional wisdom is that the U.S. income taxation of partnerships is advantageous compared to the taxation of corporations for many reasons, one of which is that it is often easier to contribute "built-in" gain property to a partnership without triggering taxation of that gain. Nevertheless, some property contributions to partnerships are treated as taxable transactions.
Basis Consistency Reporting Due Date for Estates... [ read ]
On Jan. 29, 2016, the Internal Revenue Service released Form 8971, "Information Regarding Beneficiaries Acquiring Property From a Decedent" with instructions. The form must be filed by any estate with an estate tax return that was required to be filed after July 31, 2015.
The 5th Circuit Overturns Fraud Conviction... [ read ]
The 5th Circuit last week vacated the fraud convictions of Mike Baker and Mike Gluk. Mr. Baker was the CEO of ArthroCare Corp., a publicly traded company, and Mr. Gluk was the CFO. The government accused them of violating security laws by fraudulently overstating the gross receipts of ArthroCare.
New Statute Provides Remedy for Overissuance of Stock... [ read ]
Often, shareholders of small and midsized corporations who also serve as the governing persons of those corporations must devote so much of their time and energy to business operations that corporate formalities may be overlooked and actions taken without proper approval. An example of such a situation is the issuance by a corporation of stock in excess of the number of authorized shares included in the corporation's Certificate of Formation, which happens more often than you would expect. Fortunately, a new amendment to the Texas Business Organizations Code ("TBOC") provides a relatively simple remedy for the overissuance of shares by Texas corporations.
IRS Says File 2015 Tax Returns As Soon As Possible or Criminals Will Do It For You... [ read ]
The IRS head criminal investigator, Richard Weber, had a message for all taxpayers while speaking at a conference on January 25th. "File early before the criminals file for you," Weber said. Weber explained that "current intelligence" indicates that criminal groups have amassed stolen taxpayer identification information to be used to file fraudulent refund claims during the 2016 filing season.
Decanting: Injecting Flexibility into Irrevocable Trusts... [ read ]
Irrevocable trusts restrict a beneficiary's access to assets. Generally, trusts are designed to provide trustees with sufficient flexibility to achieve the settlor's goals. However, until Doc Brown perfects the Flux Capacitor, the unforeseeable will occur and trusts, which were thought to be perfect in every regard at inception, will fail to achieve the settlors' goals.
U.S. Supreme Court to Resolve Lower Courts' Split on "Tippee" Insider Trading Criminality... [ read ]
The U.S. Supreme Court will review the Ninth Circuit's recent "tippee" insider trading case, United States v. Salman. The review is significant, because what's legal and what's not has become too unsettled - especially in the wake of the Second Circuit's 2014 decision in United States v. Newman and Chiasson.
Handling Taxpayers Who Have Forgotten Their Filing Obligations... [ read ]
We often encounter clients who have not filed tax returns for many years, some of whom have received a notice from the IRS regarding their non-filing status. Many times, these clients don't have the liquidity or even the assets to pay their delinquent tax obligations and end up applying for an Offer in Compromise (OIC).
